Brexit

Lord Davies of Stamford Excerpts

Wednesday 2nd October 2019 Lords Chamber

[Lord Davies of Stamford (Lab)]

My Lords, I want to begin by commenting on two of the speeches made earlier on by the noble Lords, Lord Lilley and Lord Howarth. They were both very original speeches; those Members of the House always make original speeches. Both were the subject of considerable reflection. Nevertheless, I detected in those speeches a considerable degree of complacency about the threats facing us. I believe that complacency is such a danger in economics and in politics, in business and generally in life, that it needs to be commented on if it arises. I may say that both noble Lords have been long-standing personal friends of mine for over half a century, and we have been arguing about politics and economics together since we first met at a university in the Fens, 55 years ago. I hope that this is not the end of a beautiful friendship.

The noble Lord, Lord Howarth, said that we may go through some choppy water if we have a hard Brexit, but that is all right; we will get through that okay, with the help of the Bank of England, fiscal spending and so forth. I have to tell him that fiscal spending is not a cost-free policy. As you build up your debt—and public debt in this country has risen from less 20 years —you are gradually reducing your capacity to intervene in the future. We learned in the 1970s where that can eventually lead, and it is not something that one should do lightly.

The noble Lord, Lord Lilley, managed to make out that in fact there would be no increase in customs checks as a result of our leaving the European Union. That seemed to me inherently implausible; but he completely left out the subject of the longest delays in any border checks, which is the issue of certificates of origin, which is extremely complicated and a nightmare for those who are organising international logistics. I think that should be taken into account. I have to tell him, too, that the continental customs authorities do not share his very optimistic view. In June I happened to be in the Netherlands, with two or three colleagues who were equally interested in the subject. We were very kindly received by the head of the Netherlands customs in Rotterdam; we saw the port there and met many of her leading staff. They told us that they have taken on about 900 new employees, simply to deal with additional UK business after Brexit. The Dutch are serious people; they do not hire 900 people just to watch the traffic and do nothing. Noble Lords can make the arithmetical calculations as easily as I can, but you can imagine, if there are 900 people who intervene with a lorry every hour or two hours, for two minutes, three minutes or five minutes, how much that will induce delays in the process of clearing trucks through Rotterdam that are destined for the United Kingdom. There is clearly a material change happening there, and the same thing is happening in other ports and suppliers. Rotterdam is of course the major port that supplies us. I do not think that complacency is in order there, either.

[Lord Howarth of Newport]

I am most grateful to the noble Lord and very much appreciate his kind personal words. If he would be good enough to look at Hansard and see what I said, he will not find that I mentioned either the Bank of England or the Treasury. What I do believe, though, is that our businesses in this country have a great deal of resilience, a great deal of power and a great deal of creativity, and they will be able to weather the transitional difficulties. I do not think that that is complacent, but a reflection of reality.

[Lord Davies of Stamford]

I must apologise to the noble Lord for adding words that he did not pronounce. I got the distinct impression that what he was talking about by way of remedial action was monetary or fiscal spending. Fiscal spending would have had the consequences that I have just outlined. I apologise to him and hope that I have not unduly traduced the message he was delivering to the House. I feel very strongly on this matter of complacency, faced with a possible recession. I know that the noble Lord will agree with me on this: recessions are very unpleasant things. They destroy businesses, they destroy jobs, they destroy the jobs that people might have had and will never have. They destroy the economic sense of security of families. A lot of the human destruction and economic destruction takes a very long time to repair. It is not something that we should walk into lightly. I am very worried indeed and I hope that he understands why that is—that we may be heading in that direction.

[Lord Howarth of Newport]

I very much agree with the noble Lord about the damage that recessions cause. Does he have any reflections on the fiscal policy of the Government, which has now become quite explosive and puts the country at very great risk, of exactly the nature he has been describing?

[Lord Davies of Stamford]

I am so glad that I am once again in thorough agreement with my noble and long-standing friend. Of course, I am very worried about that; I mentioned it in our debate last week, so I will not go into that subject now, but I could not agree more on that subject.

I must turn to the proposal that the Government made today to the European Commission. It seems to me to be a thoroughly dishonest and disreputable document. It is exactly the sort of document that one would expect our Prime Minister to deliver and was probably not one where there was any expectation that it would be accepted. I suppose that Mr Johnson wanted to be in a position where he had made some offer, so that he could then say that it was all the fault of the European Union for not accepting it—albeit that he did not produce anything until a month before the deadline. The document does not address at all the matter that is of greatest concern to the Irish, which is the long-term avoidance in Ireland of an internal border or frontier. A border, in my definition—and in the definition of most reasonable people—is an administrative line on the map which, if you cross it, has practical and probably financial consequences. That does not mean that the border has to have an infrastructure at any particular point. It means simply that if you cross this line, you will be deemed to be liable in one way or another. That is exactly what we must avoid in Ireland, if we want to respect the Belfast agreement. It is what the Irish are determined to avoid. That is the position at present: there is no internal border on the island of Ireland. You can go between any of the 26 counties and the six counties, any time you want, with no consequences whatever of an administrative or practical kind. That is what we need to preserve. That is not achieved by this proposal and I imagine that for that reason alone it will and should be rejected.

The contradictions have already been pointed out by my noble friend Lord Adonis. They are quite serious because they have completely devalued the document. On page 3, the document says:

“This is entirely compatible with maintaining an open border in Northern Ireland”.


In the next paragraph, it says that,

“all customs processes needed to ensure compliance with the UK and EU customs regimes should take place on a decentralised basis”.

If there is an open border in Northern Ireland, why do you need customs processes and regimes? That is completely contradictory. I am taking a little more time, but I had two interventions.

The other notable contradiction in this document is on page 2, where it says that the proposal,

“provides for the potential creation of an all-island regulatory zone on the island of Ireland”.

Two paragraphs later, it says that under these arrangements,

“Northern Ireland will be fully part of the UK customs territory”.

These are blatant contradictions and devalue the whole document.

[Baroness Berridge]

My Lords, while there has been grace because of interventions, I remind the House that the advisory speaking time is six minutes.

--- Later in debate ---

[Lord Callanan]

The Chief Whip is not here, but the Leader of the House has heard the noble Lord’s comments. I am sure the usual channels will want to discuss how much time is available.

[Lord Davies of Stamford]

I thank the Minister for giving way. Is not the document presented to the Commission today thoroughly disingenuous? It refers to an open border. That is of course the position in Ireland today. If there were an open border, there would be no need for customs controls or checks of any kind, yet the Minister has just referred to the need to have those.

[Lord Callanan]

The situation is changing; that is why we need to agree new arrangements. We are leaving the European Union, the customs union and the single market, so clearly the arrangements will not be able to stay exactly as they are at the moment when we are part of those institutions. These proposals will allow us to move forward and focus on the positive future relationship that I believe is in all of our interests.

I have enormous respect for the noble Lord, Lord Empey, as he knows; he always makes insightful contributions in this House. He raised some important questions that I want to answer. We recognise that, for reasons of geography and economics, some things such as agri-food are increasingly managed on a common basis across the island of Ireland. Regulatory checks already take place on some goods moving between Great Britain and Northern Ireland. While the proposals would see an increase in some of these, there would be no need for traders to submit customs declarations and we would go ahead only with the consent of the Northern Ireland Executive and Assembly. In light of this progress, we must take the route suggested by my noble friend Lord Howell of Guildford and choose to continue to work together in a positive spirit. In that way, we will ensure the best possible outcome for the UK, so that we deliver on the instructions given to us by the British people.

The noble and learned Lord, Lord Goldsmith, the noble Lord, Lord Marks, and the noble Viscount, Lord Chandos, asked about the Benn Act. The noble Baroness, Lady Hayter, the noble Lord, Lord Wallace of Saltaire, and my noble friend Lord Trenchard referred to it as the “surrender Act”.